POLITICS AND ECONOMICS.* Is a science of political economy possible
P or does the so-called science of political economy consist merely of a set of practical rules, suitable for the guidance of the industrial society of the modern civilised world, but of no validity beyond its limits, and even within them subject to unascertained limitations and exceptions P The writer of the work now before us, while not, in words, refusing to give to political economy the name of a science, thinks that its principles have no universal validity, and are merely a useful set of practical rules which have been arrived at in a somewhat tentative and haphazard way, and are liable to indefinite modification by further experience.
We altogether differ with him. We think that the early political economists established much which is of absolute and truly scientific value in the theory of prices, of the relation to each other of wages, interest, and rent, and of money in the sense of currency ; and to say that these are not scientifically true, because we do not in all cases see their operation in practice,—to say, for instance, that the theory of prices is unscientific because there are many cases where prices are not determined by competition, but by custom,—is as unreasonable as it would be to say that the mathematical theory of mechanics is worthless because its postulates of perfectly rigid materials and no friction are never realised in practice. The theoretical part of political economy, like that of mechanics, is absolutely true when considered as science ; but in practice it works itself out with only approximate truth. Statesmanship, like engineering, is not a theoretical science, but a practical art ; but the engineer cannot disregard the mathematical theories of mechanics, nor ought the statesman to disregard the scientific theories of political economy.
The comparative discredit into which Political Economy has fallen, which makes it possible to ask the question that we began with, is due to its success. Though its nature is scientific, its teachers have always aimed at influencing practice; and, in this country at least, they have done so with great effect. That complete reconstruction of our commercial and financial systems, which is perhaps the greatest achievement of our legislation during the present century, was effected under the direct influence of their teaching. It was natural that in the vast work of reconstructing our laws and institutions according to the principles of common-sense, the removal of restrictions should come first, merely because it was the simplest part of the work ; and by reason of its comparative simplicity, it derived the most benefit.from the light of theoretical science; for it is a general principle that theory, as contrasted with experience, is most to be trusted as a guide in those arts and sciences whereof the subject-matter is the simplest. But now a new generation has grown up, to which freedom of industry and of commerce, like freedom of thought, appears part of the order of nature. The work that has now to be done consists, for the most part, not in simplification or destruction, as did that of the men who established Free-trade ; the problems with which we find ourselves face to face are mostly problems of construction, and are too complex for much light to be thrown upon them by a theoretical political economy, like that of the founders of the science ; and the political economy which guided the former generation has now in consequence come to be not only neglected, which is, under the circumstances, inevitable, but discredited, which is unjust. But while we contend for the absolute scientific value of the older political economy, and contend, moreover, that every true theory ought to be cherished as a "possession for ever," not only because it is true, but because we never know when it may prove to be of practical importance, at the same time we thoroughly agree with the author before us that the application of political economy to practice is a part of practical statesmanship ; and we agree also that statesmanship is much more nearly allied to common-sense than to science, and must make progress, not by the fearless application of theory, but by a tentative process.
Most of the questions of the present time are particular cases of the question what duties ought to be undertaken by the State and what ought to be left to individuals. The unwisdom of commercial protection was the great discovery of the political economists, and its abolition was their great achievement ; and while that reform was in progress, it was natural to think that the work of reconstruction would be finished when all restrictions were got rid of, and that the whole duty of rulers and legislators consisted merely in securing the utmost possible liberty to the individual. But now, when the struggle for Freetrade has become part of history, and we can look on this class of questions more impartially, it is probable that most thoughtful men will agree with the writer before us in thinking that no general rule is possible for deciding those cases in which the State ought to interfere, but that every case must be separately considered as it arises. This is well illustrated by two instances, which we proceed to mention. The latter part of Mr. Cunningham's volume is occupied by brief reviews of the most important legislative measures of recent years, so far as they have any social bearing. These are mostly too slight to be satisfactory, but they contain many, valuable observations. He is strongly in favour of the Factory Acts, by which the hours of labour of women and children are limited; and he sees clearly the true defence of those laws,—namely, that although they do interfere with individual freedom, they do not belong to the category of commercial legislation, but of sanitary legislation. No law was ever more successful than the chief of these, the Ten Hours Act of 1846. Its success is proved by this, that the populations affected by it have accepted it as part of the order of nature, and no proposal for its repeal would have the least chance of their support. We may mention here, though Mr. Cunningham does not, that more than twenty years ago, when the Home Office endeavoured for the sake of safety to compel the owners of factories to boxin the "overhead shafting," and the owners, knowing that this would be extremely expensive, and believing, on good grounds, that it would not tend to safety, formed a kind of Trades Union for their own protection, they made it a fundamental rule not to seek the repeal of the Ten Hours' Act.
With this, contrast the legislation of 1875 and 1876, passed under the influence of Mr. Plimsoll's agitation, for the protection of life at sea. The statistics of wrecks prove this legislation to be a total failure. How are we to account for this contrast between the operation of the Factory Acts and of the Shipping Acts P Their principles are the same; the Factory Acts are for the preservation of health, and the Shipping Acts for the preservation of life ; for this purpose they both interfere with individual freedom, especially with that freedom of contract between the strong and the weak which is so dear to some minds, and have created new administrative machinery for the purpose. This shows that in such matters principle, or theory, is not a sufficient guide ; legislation must proceed tentatively, and success must not be regarded as certain until it is proved by experience. Legislation of a totally different kind was lately proposed by the Government, for diminishing the temptation to criminal carelessness on the part of shipowners by a legislative prohibition of over-insurance. Mr. Cunningham thinks (p.253) that this also would prove a failure, and would cause insurance business to be transferred from Lloyd's, which is practically a public institution, to private "mutual clubs," which would be beyond supervision; and he adds (p. 254), "We should give the seaman full means of proceeding against the owner on the plea of the unseaworthiness of the ship in which he was to sail ; but we should enable the owner to insure to the value he set on his venture, including the loss to which he might be exposed because of undue detention on account of sailors' complaints. On the other hand, it might be possible to strengthen the hands of underwriters in proceeding against owners who were guilty of making fraudulent over-valuation of their risks. In this way, we should attempt to guard against loss at sea, not by limiting the powers of shipowners through the action of the Board of Trade on the one hand, and the legal terms of insurance on the other, but by rendering more effective the checks on misconduct which can be brought to bear by sailors on one side, and by underwriters on the other."
A remarkable suggestion is made by Mr. Cunningham on the subject of the law affecting trade-disputes. He is speaking of the possible injustice to employers in enacting, as has been done by the Conspiracy and Protection of Property Act, that no action shall be punishable as a conspiracy when done by two or more persons acting together, which would not have been punish able if committed by one alone. He quotes an instance mentioned by Lord Winmarleigh in the debate on the Bill, where three men in charge of a smelting-furnace inflicted a loss of two thousand pounds on the ironmaster who employed them, by leaving their work without notice in consequence of a dispute about terms. In such a case, the present law gives the employer no remedy except an action for damages, which is practically no remedy at all. After admitting that the change of the law of conspiracy mentioned above has done much good by making trade-disputes less bitter, Mr. Cunningham goes on :—
" It must be noted that the difficulty urged by Lord Win marleigh is a real one, and that if the employer could be relieved from the sense of injustice under which he suffers from the difficulty of securing redress, there would be a still greater gain from the removal of the existing friction between the two classes. There is only one direction in which we can look for such a result. The funds of Trades Unions are very large, and if these societies were rendered liable for damages inflicted by their members for trade objects, the employer would have ample security against cases like that instanced above, for there would be a responsible body from which he could recover his 22,000. Nor would such a measure be so prejudicial to the unions as may appear; the master would prefer to employ members of a union, as he would have no means of recovering damages from non-unionists; the whole weight of the employer's influence would be used to increase the membership of the unions ; and they would thus become richer and more powerful, as well as more completely organised institutions, than ever. With such a development of Trades Unionism, it would be once more possible, as well as necessary in their own interests, for the leaders of the unions to take measures to secure that their members did thoroughly good work, and labour might be once more as completely organised as in the days of the old guilds, but in forms which are suited to modern conditions of life."
We cannot give any decided opinion as to the practicability of this ; but it is right in principle, and we have much pleasure in commending it to the consideration of our readers.
Our space does not permit us to give any account of the chapters with which this work commences, on the history of public economy and commercial and social legislation in Eng land. We have been much interested by the account of the public economy of medissval England, of which Mr. Cunningham takes a very favourable view. We do not find much of theoretical value in his work, but we quote one observation which we think luminous ;—he has been defending compulsory education The State is concerned in seeing that every man performs that minimum of duty which public opinion demands of every citizen." The italics are the author's.
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